Ghana's average lending rate sharply declined to 15.64% in June 2026, extending a broad reduction in borrowing costs over the past year, according to the Bank of Ghana's July 2026 Summary of Economic and Financial Data. This figure represents an 11.36 percentage point decrease from 27.00% recorded in June 2025, making credit more affordable for businesses and households.
This significant drop in lending rates was primarily driven by a substantial easing of the Bank of Ghana's monetary policy rate. The policy rate, which influences commercial bank loan pricing, fell from 28.00% in June 2025 to 14.00% by March 2026, remaining unchanged through June. This cumulative 14.00 percentage point reduction over 12 months provided a lower benchmark for financial market pricing.
The decline in lending rates aligns with Ghana's broader economic strategy to stimulate growth by making capital more accessible. Lower borrowing costs encourage investment and consumption, which are vital for economic expansion. This trend also reflects improved liquidity conditions within the banking system, as evidenced by the interbank rate falling to 10.24% in June 2026 from 27.02% a year earlier.
The Bank of Ghana's report indicates that the monetary easing cycle has successfully transmitted to the credit market. This means that the central bank's actions to lower interest rates are effectively reducing the cost at which businesses and individuals can access bank financing. This transmission is crucial for supporting economic activity and fostering a more dynamic private sector.
However, the momentum of declining lending rates appears to be slowing. The average lending rate decreased only marginally from 15.83% in May to 15.64% in June. Similarly, the Ghana Reference Rate, a key benchmark for commercial loans, showed only slight movement, dropping from 10.03% in May to 10.02% in June. This suggests that the downward adjustment in lending rates may be approaching a floor under current market conditions.
Adding to this emerging pressure, Treasury bill rates have begun to rise after steep declines earlier in 2026. The interest-equivalent yield on the 91-day Treasury bill increased from 4.89% in March to 5.27% in June. The 182-day bill rose from 6.51% to 7.21% over the same period, while the 364-day bill climbed from 9.57% to 11.29%. This upward movement is most pronounced for longer-term Treasury bills, with the 364-day yield gaining 1.72 percentage points between March and June.
The secondary government bond market also mirrored this pattern, with yields on most post-Domestic Debt Exchange Programme bonds rising in June. For instance, the four-year bond yield increased to 10.70% in June from 10.50% in May, and the five-year yield climbed more sharply to 13.00% from 9.80%. This indicates that investors are demanding higher returns, particularly for instruments with longer maturities, reflecting a reassessment of risk and inflation expectations.
The increase in government security yields coincides with a rise in headline inflation, which reached 5.30% in June from 3.70% in May. While inflation remains low compared to 2025 levels, this increase may influence investors' assessment of real returns, especially on short-term government instruments. This could lead to a more cautious approach from investors, potentially pushing yields higher.
Going forward, policymakers and market participants will closely monitor the interplay between lending rates, Treasury yields, and inflation. A continued rise in government security yields could put upward pressure on commercial lending rates, potentially dampening the positive effects of the recent monetary easing. The Bank of Ghana will need to carefully balance its monetary policy to maintain price stability while supporting economic growth.